Reference no: EM131459204

Question: Numi Tea founders, siblings Ahmed and Reem Rahim, immigrated to the United States when they were young children and grew up in Cleveland, Ohio. Reem became a biomedical engineer. Ahmed traveled the world as a photographer and settled for a time in Prague where he opened two tea shops. Reem eventually left her career to pursue life as an artist. In 1999, the two reconnected in Oakland, California, and started Numi Tea in Reem's apartment. "I think in the positioning of our brand, we wanted to target a certain type of customer base, from the natural health food stores, to fine dining and hotels, to universities and coffee shops, gourmet stores," says Ahmed. "What I've been most surprised about in our growth is the mass market consumer." In recent years, demand by the average American consumer for organic and ethically produced products has exploded. At the same time, economic influences have driven the more affluent and natural foods consumers to large discounters such as Target, supersize grocery chains, warehouse clubs, and online shopping.

Today, explains Jennifer Mullin, vice president of marketing for Numi Tea, the average Numi consumer is female, college educated, and buys two to three boxes of tea per month, usually green tea. She also buys organic products whenever possible. All of these details, while not surprising, are fairly new. Until Mullin joined the team and formalized their marketing department, Numi assumed its customers fit the same profile as the staff-young, cool, and urban. While many of Numi tea drinkers are all these things, Mullin's findings proved that the company needed to put some additional energy toward targeting the younger, college market. They launched an initiative to raise awareness of the product on campuses where people are more inclined to be interested in issues of sustainability, fair trade, and organics. Because Numi teas are considered a premium product, they do have an affordable but still higher price point than conventionally produced teas. College students in general have less money to spend, so Numi approached the food service departments of universities such as Stanford to serve the tea as part of their prepaid meal plans. Not only does the food service contract represent a giant account, it encourages trial. Sampling is Numi's most successful marketing activity for attracting new users. Students can learn to love the product, essentially for free. The most compelling reason for drinking Numi tea is its health benefits.

The company found that it doesn't need to spend much time talking up the organic aspect of its product. In the premium and natural foods space where Numi operates, organic is expected. There is the threat that as the terms "organic" and "natural" invade the mainstream marketplace, a lack of trust or cynicism may arise as some products will inevitably fail to live up to their labels' claims. This is why Numi relies heavily on educating its consumers about the product. When targeting women, their most valued consumer, says Mullin, "We have an inhouse PR team that works a lot with editors [of women's magazines] to educate them on tea and make sure they understand the healthy properties of tea." They follow up with sampling at Whole Foods or events targeted toward environmentally conscious moms. Numi rounds out the education efforts on its Web site with more health information as well as in-depth articles on the benefits of specific teas. Although still young, the Numi brand is expanding rapidly and has enjoyed success overseas as well. Whatever the marketing and PR teams do-store sampling, environmental events, or partnerships with like-minded companies such as Clif Bar-they continue to survey and assess the demographic and psychographic profiles of their consumer.

1. Which of the four basic targeting strategies does Numi Tea employ when reaching its markets?

2. Would you classify Numi Tea's marketing strategy as "concentrated"? If so, what are the plusses and minuses of using such a strategy in today's market?